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Colin Levy

The Link Between NDAs and Your Company’s Growth

 

Have you noticed an increase in Non-Disclosure Agreements (NDAs) volume at your company?

These legally binding documents help safeguard valuable information by providing mechanisms for sharing and protecting confidential information. In fact, according to HBR researchers, over one-third of the U.S. workforce is now bound by an NDA. Malbek’s CLM software, Contrax, allows you to track agreements and revenue while uncovering actionable trends using our software’s data. If your company notices a significant increase in demand for these documents, consider this a great indicator that your business is growing.

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Let’s explore three reasons why an increase in NDAs can mean your company is gaining success and how they are achieving it.

  1. Expansion of Business Partnerships and Collaborations:

    An increase in NDAs might signal that a company is expanding its network of business partners and affiliates. As a company grows and diversifies its offerings or needs more outside support, it is likely to engage in more of these relationships, leading to an increased demand for NDAs to protect sensitive information and ensure both parties’ interests are safeguarded. Companies are also using NDAs as a tool to protect their data during the hiring process. It’s important your employees know this isn’t to discourage employee communication but rather to safeguard confidential information.

  2. Increase in Innovative Projects and Intellectual Property:

    If a company is requesting more NDAs to be put in place, this can indicate that they are working on innovative projects or developing new intellectual property (IP). This IP could be in the form of new products, services, or technologies that the company wants to protect from competitors. According to a survey conducted by the law firm Latham & Watkins, 98% of companies use NDAs to protect their confidential information and intellectual property, which indicates that most companies recognize the importance of NDAs. By using NDAs, businesses can share this valuable information with select partners or employees while preventing unauthorized dissemination or misuse.

  3. Pursuing Mergers and Acquisitions:

    When companies participate in mergers and acquisitions (M&A), they usually need to share a significant amount of confidential information with potential buyers or partners. This process often involves signing NDAs to protect both parties’ critical IP and other important information. An uptick in NDAs might suggest that a company is pursuing M&A opportunities, signaling potential growth and expansion.

Non-Disclosure Agreements serve an essential function in safeguarding a company’s valuable information and assets. They can also serve as an indicator of business growth and success. The increased need for NDAs might suggest that a company is expanding its partnerships, hiring new employees, working on innovative projects, or pursuing mergers and acquisitions.

By understanding the link between NDAs and business growth, companies can better appreciate the strategic value of these agreements and use them as a tool to achieve their goals. Malbek’s Contrax allows an enterprise to not only store, manage and expedite these NDAs, but also provides reports and insights into the state of their growth and can help them to better meet their customers’ needs.